Glossary

Glossary of Health Coverage and Medical Terms
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This glossary defines many commonly used terms, but isn’t a full list. These glossary terms and definitions are
intended to be educational and may be different from the terms and definitions in your plan or health insurance
policy. Some of these terms also might not have exactly the same meaning when used in your policy or plan, and
in any case, the policy or plan governs. (See your Summary of Benefits and Coverage for information on how to
get a copy of your policy or plan document.)
 Underlined text indicates a term defined in this Glossary.
 See page 6 for an example showing how deductibles, coinsurance and out-of-pocket limits work together in a real
life situation.

Allowed Amount

This is the maximum payment the plan will pay for a
covered health care service. May also be called "eligible
expense", "payment allowance", or "negotiated rate".

Appeal

A request that your health insurer or plan review a
decision that denies a benefit or payment (either in whole
or in part).

Balance Billing

When a provider bills you for the balance remaining on
the bill that your plan doesn’t cover. This amount is the
difference between the actual billed amount and the
allowed amount. For example, if the provider’s charge is
$200 and the allowed amount is $110, the provider may
bill you for the remaining $90. This happens most often
when you see an out-of-network provider (non-preferred
provider). A network provider (preferred provider) may
not bill you for covered services.

Claim

A request for a benefit (including reimbursement of a
health care expense) made by you or your health care
provider to your health insurer or plan for items or
services you think are covered.

Coinsurance

Your share of the costs
of a covered health care
service, calculated as a
percentage (for
example, 20%) of the
allowed amount for the
service. You generally

Jane pays

20%

Her plan pays

Complications of Pregnancy

Conditions due to pregnancy, labor, and delivery that
require medical care to prevent serious harm to the health
of the mother or the fetus. Morning sickness and a nonemergency caesarean section generally aren’t
complications of pregnancy.

Copayment

A fixed amount (for example, $15) you pay for a covered
health care service, usually when you receive the service.
The amount can vary by the type of covered health care
service.

Cost Sharing

Your share of costs for services that a plan covers that
you must pay out of your own pocket (sometimes called
“out-of-pocket costs”). Some examples of cost sharing
are copayments, deductibles, and coinsurance. Family
cost sharing is the share of cost for deductibles and outof-pocket costs you and your spouse and/or child(ren)
must pay out of your own pocket. Other costs, including
your premiums, penalties you may have to pay, or the
cost of care a plan doesn’t cover usually aren’t considered
cost sharing.

Cost-sharing Reductions

Discounts that reduce the amount you pay for certain
services covered by an individual plan you buy through
the Marketplace. You may get a discount if your income
is below a certain level, and you choose a Silver level
health plan or if you're a member of a federallyrecognized tribe, which includes being a shareholder in an
Alaska Native Claims Settlement Act corporation.

80%

pay coinsurance plus (See page 6 for a detailed example.)
any deductibles you owe. (For example, if the health
insurance or plan’s allowed amount for an office visit is
$100 and you’ve met your deductible, your coinsurance
payment of 20% would be $20. The health insurance or
plan pays the rest of the allowed amount.)
(DT - OMB control number: 1545-0047/Expiration Date: 12/31/2019)(DOL - OMB control number: 1210-0147/Expiration date:
5/31/2022)(HHS - OMB control number: 0938-1146/Expiration date: 10/31/2022)

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Deductible

An amount you could owe
during a coverage period
(usually one year) for
covered health care
services before your plan
begins to pay. An overall
Jane pays
Her plan pays
deductible applies to all or
100%
0%
almost all covered items
(See page 6 for a detailed
and services. A plan with
example.)
an overall deductible may
also have separate deductibles that apply to specific
services or groups of services. A plan may also have only
separate deductibles. (For example, if your deductible is
$1000, your plan won’t pay anything until you’ve met
your $1000 deductible for covered health care services
subject to the deductible.)

Diagnostic Test

Tests to figure out what your health problem is. For
example, an x-ray can be a diagnostic test to see if you
have a broken bone.

Durable Medical Equipment (DME)

Equipment and supplies ordered by a health care provider
for everyday or extended use. DME may include: oxygen
equipment, wheelchairs, and crutches.

Emergency Medical Condition

An illness, injury, symptom (including severe pain), or
condition severe enough to risk serious danger to your
health if you didn’t get medical attention right away. If
you didn’t get immediate medical attention you could
reasonably expect one of the following: 1) Your health
would be put in serious danger; or 2) You would have
serious problems with your bodily functions; or 3) You
would have serious damage to any part or organ of your
body.

Emergency Medical Transportation

Ambulance services for an emergency medical condition.
Types of emergency medical transportation may include
transportation by air, land, or sea. Your plan may not
cover all types of emergency medical transportation, or
may pay less for certain types.

Emergency Room Care / Emergency Services

Services to check for an emergency medical condition and
treat you to keep an emergency medical condition from
getting worse. These services may be provided in a
licensed hospital’s emergency room or other place that
provides care for emergency medical conditions.
Glossary of Health Coverage and Medical Terms

Excluded Services

Health care services that your plan doesn’t pay for or
cover.

Formulary

A list of drugs your plan covers. A formulary may
include how much your share of the cost is for each drug.
Your plan may put drugs in different cost sharing levels
or tiers. For example, a formulary may include generic
drug and brand name drug tiers and different cost sharing
amounts will apply to each tier.

Grievance

A complaint that you communicate to your health
insurer or plan.

Habilitation Services

Health care services that help a person keep, learn or
improve skills and functioning for daily living. Examples
include therapy for a child who isn’t walking or talking at
the expected age. These services may include physical
and occupational therapy, speech-language pathology,
and other services for people with disabilities in a variety
of inpatient and/or outpatient settings.

Health Insurance

A contract that requires a health insurer to pay some or
all of your health care costs in exchange for a premium.
A health insurance contract may also be called a “policy”
or “plan”.

Home Health Care

Health care services and supplies you get in your home
under your doctor’s orders. Services may be provided by
nurses, therapists, social workers, or other licensed health
care providers. Home health care usually doesn’t include
help with non-medical tasks, such as cooking, cleaning, or
driving.

Hospice Services

Services to provide comfort and support for persons in
the last stages of a terminal illness and their families.

Hospitalization

Care in a hospital that requires admission as an inpatient
and usually requires an overnight stay. Some plans may
consider an overnight stay for observation as outpatient
care instead of inpatient care.

Hospital Outpatient Care

Care in a hospital that usually doesn’t require an
overnight stay.
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In-network Coinsurance

Your share (for example, 20%) of the allowed amount
for covered healthcare services. Your share is usually
lower for in-network covered services.

In-network Copayment

A fixed amount (for example, $15) you pay for covered
health care services to providers who contract with your
health insurance or plan. In-network copayments usually
are less than out-of-network copayments.

Marketplace

A marketplace for health insurance where individuals,
families and small businesses can learn about their plan
options; compare plans based on costs, benefits and other
important features; apply for and receive financial help
with premiums and cost sharing based on income; and
choose a plan and enroll in coverage. Also known as an
“Exchange”. The Marketplace is run by the state in some
states and by the federal government in others. In some
states, the Marketplace also helps eligible consumers
enroll in other programs, including Medicaid and the
Children’s Health Insurance Program (CHIP). Available
online, by phone, and in-person.

Maximum Out-of-pocket Limit

Yearly amount the federal government sets as the most
each individual or family can be required to pay in cost
sharing during the plan year for covered, in-network
services. Applies to most types of health plans and
insurance. This amount may be higher than the out-ofpocket limits stated for your plan.

Medically Necessary

Health care services or supplies needed to prevent,
diagnose, or treat an illness, injury, condition, disease, or
its symptoms, including habilitation, and that meet
accepted standards of medicine.

Minimum Essential Coverage

Minimum essential coverage generally includes plans,
health insurance available through the Marketplace or
other individual market policies, Medicare, Medicaid,
CHIP, TRICARE, and certain other coverage. If you are
eligible for certain types of minimum essential coverage,
you may not be eligible for the premium tax credit.

Glossary of Health Coverage and Medical Terms

Minimum Value Standard

A basic standard to measure the percent of permitted
costs the plan covers. If you’re offered an employer plan
that pays for at least 60% of the total allowed costs of
benefits, the plan offers minimum value and you may not
qualify for premium tax credits and cost sharing
reductions to buy a plan from the Marketplace.

Network

The facilities, providers and suppliers your health insurer
or plan has contracted with to provide health care
services.

Network Provider (Preferred Provider)

A provider who has a contract with your health insurer or
plan who has agreed to provide services to members of a
plan. You will pay less if you see a provider in the
network. Also called “preferred provider” or
“participating provider.”

Orthotics and Prosthetics

Leg, arm, back and neck braces, artificial legs, arms, and
eyes, and external breast prostheses after a mastectomy.
These services include: adjustment, repairs, and
replacements required because of breakage, wear, loss, or
a change in the patient’s physical condition.

Out-of-network Coinsurance

Your share (for example, 40%) of the allowed amount
for covered health care services to providers who don’t
contract with your health insurance or plan. Out-ofnetwork coinsurance usually costs you more than innetwork coinsurance.

Out-of-network Copayment

A fixed amount (for example, $30) you pay for covered
health care services from providers who do not contract
with your health insurance or plan. Out-of-network
copayments usually are more than in-network
copayments.

Out-of-network Provider (Non-Preferred
Provider)

A provider who doesn’t have a contract with your plan to
provide services. If your plan covers out-of-network
services, you’ll usually pay more to see an out-of-network
provider than a preferred provider. Your policy will
explain what those costs may be. May also be called
“non-preferred” or “non-particiapting” instead of “outof-network provider”.

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Out-of-pocket Limit

The most you could pay
during a coverage period
(usually one year)
for your share of the
costs of covered
Jane pays
Her plan pays
services. After you meet
0%
100%
this limit the
(See page 6 for a detailed example.)
plan will usually pay
100% of the
allowed amount. This limit helps you plan for health
care costs. This limit never includes your premium,
balance-billed charges or health care your plan doesn’t
cover. Some plans don’t count all of your copayments,
deductibles, coinsurance payments, out-of-network
payments, or other expenses toward this limit.

Physician Services

Health care services a licensed medical physician,
including an M.D. (Medical Doctor) or D.O. (Doctor of
Osteopathic Medicine), provides or coordinates.

Plan

Health coverage issued to you directly (individual plan)
or through an employer, union or other group sponsor
(employer group plan) that provides coverage for certain
health care costs. Also called "health insurance plan",
"policy", "health insurance policy" or "health
insurance".

Preauthorization

A decision by your health insurer or plan that a health
care service, treatment plan, prescription drug or durable
medical equipment (DME) is medically necessary.
Sometimes called prior authorization, prior approval or
precertification. Your health insurance or plan may
require preauthorization for certain services before you
receive them, except in an emergency. Preauthorization
isn’t a promise your health insurance or plan will cover
the cost.

Premium

The amount that must be paid for your health insurance
or plan. You and/or your employer usually pay it
monthly, quarterly, or yearly.

Glossary of Health Coverage and Medical Terms

Premium Tax Credits

Financial help that lowers your taxes to help you and
your family pay for private health insurance. You can get
this help if you get health insurance through the
Marketplace and your income is below a certain level.
Advance payments of the tax credit can be used right
away to lower your monthly premium costs.

Prescription Drug Coverage

Coverage under a plan that helps pay for prescription
drugs. If the plan’s formulary uses “tiers” (levels),
prescription drugs are grouped together by type or cost.
The amount you'll pay in cost sharing will be different
for each "tier" of covered prescription drugs.

Prescription Drugs

Drugs and medications that by law require a prescription.

Preventive Care (Preventive Service)

Routine health care, including screenings, check-ups, and
patient counseling, to prevent or discover illness, disease,
or other health problems.

Primary Care Physician

A physician, including an M.D. (Medical Doctor) or
D.O. (Doctor of Osteopathic Medicine), who provides
or coordinates a range of health care services for you.

Primary Care Provider

A physician, including an M.D. (Medical Doctor) or
D.O. (Doctor of Osteopathic Medicine), nurse
practitioner, clinical nurse specialist, or physician
assistant, as allowed under state law and the terms of the
plan, who provides, coordinates, or helps you access a
range of health care services.

Provider

An individual or facility that provides health care services.
Some examples of a provider include a doctor, nurse,
chiropractor, physician assistant, hospital, surgical center,
skilled nursing facility, and rehabilitation center. The
plan may require the provider to be licensed, certified, or
accredited as required by state law.

Reconstructive Surgery

Surgery and follow-up treatment needed to correct or
improve a part of the body because of birth defects,
accidents, injuries, or medical conditions.

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Referral

A written order from your primary care provider for you
to see a specialist or get certain health care services. In
many health maintenance organizations (HMOs), you
need to get a referral before you can get health care
services from anyone except your primary care provider.
If you don’t get a referral first, the plan may not pay for
the services.

Urgent Care

Care for an illness, injury, or condition serious enough
that a reasonable person would seek care right away, but
not so severe as to require emergency room care.

Rehabilitation Services

Health care services that help a person keep, get back, or
improve skills and functioning for daily living that have
been lost or impaired because a person was sick, hurt, or
disabled. These services may include physical and
occupational therapy, speech-language pathology, and
psychiatric rehabilitation services in a variety of inpatient
and/or outpatient settings.

Screening

A type of preventive care that includes tests or exams to
detect the presence of something, usually performed
when you have no symptoms, signs, or prevailing medical
history of a disease or condition.

Skilled Nursing Care

Services performed or supervised by licensed nurses in
your home or in a nursing home. Skilled nursing care is
not the same as “skilled care services”, which are services
performed by therapists or technicians (rather than
licensed nurses) in your home or in a nursing home.

Specialist

A provider focusing on a specific area of medicine or a
group of patients to diagnose, manage, prevent, or treat
certain types of symptoms and conditions.

Specialty Drug

A type of prescription drug that, in general, requires
special handling or ongoing monitoring and assessment
by a health care professional, or is relatively difficult to
dispense. Generally, specialty drugs are the most
expensive drugs on a formulary.

UCR (Usual, Customary and Reasonable)

The amount paid for a medical service in a geographic
area based on what providers in the area usually charge
for the same or similar medical service. The UCR
amount sometimes is used to determine the allowed
amount.

Glossary of Health Coverage and Medical Terms

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How You and Your Insurer Share Costs - Example
Jane’s Plan Deductible: $1,500

Coinsurance: 20%

Out-of-Pocket Limit: $5,000
December 31st
End of Coverage Period

January 1st
Beginning of Coverage Period

more
costs

Jane pays

100%

Her plan pays

0%

Jane hasn’t reached her
$1,500 deductible yet
Her plan doesn’t pay any of the costs.
Office visit costs: $125
Jane pays: $125
Her plan pays: $0

more
costs

Jane pays

20%

Her plan pays

80%

Jane reaches her $1,500
deductible, coinsurance begins
Jane has seen a doctor several times and
paid $1,500 in total, reaching her
deductible. So her plan pays some of the
costs for her next visit.
Office visit costs: $125
Jane pays: 20% of $125 = $25
Her plan pays: 80% of $125 = $100

Jane pays

0%

Her plan pays

100%

Jane reaches her $5,000
out-of-pocket limit
Jane has seen the doctor often and paid
$5,000 in total. Her plan pays the full
cost of her covered health care services
for the rest of the year.
Office visit costs: $125
Jane pays: $0
Her plan pays: $125

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Glossary of Health Coverage and Medical Terms

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